Solar panels

Solar Panels – The town where one in ten have opted for solar power

A million people now have solar panels on the roof of their home, a number that needs to increase further.

Yet the residents of one small town in Cornwall don’t need persuading.

In Wadebridge, on the Camel estuary, more than 500 homes already have solar panels on their roofs, which is almost 10% of homes in the area. This is likely to be the highest concentration of solar panels in the UK, making the town a candidate for the solar power ‘capital’ of the country.

Cornwall is exceptionally rich in this resource, with 1,541 sunshine hours every year. But people living elsewhere in the UK can also benefit.

As long as you are willing to invest at least £5,000 – and wait for a decade to get your money back – the eventual savings could be substantial.

Break-even point

An investor, who runs a bed and breakfast in the area, had solar panels installed three years ago.

Considering the subsidy he gets for generating electricity, and the lower bill from his energy supplier, his savings amount to around £1,800 a year. He is, therefore, likely to break even on the cost of installation within six years.

However, while that figure may be typical for Cornwall, anyone living around London can expect to break even in 10 years – and farther north you go, the longer it will take you to make your money back. For instance, for people living in Stirling Scotland should expect to break even within 12 years from installation.

As there is, as yet, no way of storing the power generated, the key is to use as much energy as possible during the daylight hours. The system will still work when its cloudy and even a full moon could generate a small amount.

Considerations

Unless you live in a conservation area, you don’t usually need planning permissions for solar panels. However, there are some things you should consider.

Your roof can’t have any shading, either from trees or buildings.

The angle of your roof must be between 10 and 40 degrees from horizontal, and it needs to face south or south-west.

Having the breeze from the sea is good as they work better when they’re not too hot.

You will get a greater subsidy if your home is already energy efficient – being at least a Band D on its Energy Proficiency Certificate (EPC).

Tariffs

Currently, solar panels only makes financial sense due to public subsidies – which we pay through the green levy on our electricity bills.

The subsidy is intended to help meet climate change targets, as houses produce 55% of the UK’s CO2 emissions.

This means the government is paying you to produce renewable energy, whether you’re actually using it or not.

This is what is called the Feed in Tariff (FiT).

The first element is the generation FiT – the amount you are paid for the electricity you generate.

The rate of this is gradually reducing, and will next go down on 1 July. You will then be paid at this rate – plus inflation – for 20 years.

Costs and savings

To compensate for falling FiT rates, the cost of installing solar panels is reducing.

Three years ago you may have paid £10,000 to have solar panels installed. Today the same system can be installed for between £5,000-8,000.

The second element of the FiT is the export rate. This is the energy you don’t use yourself, but instead is returned to the grid. This is lower than the generation element.

For this reason it is more economical to use as much of your own energy as possible, rather than exporting it.

People that work from home and those who spend a lot of the day at home, such as pensioners, will save a lot more than those out at work all day.

Investing in solar power if still a brave decision, given the time it takes to make your money back and if you decide to move house in the meantime, the new buyer may not appreciate the value of the system installed.

However, plans to create batteries to store home-produced energy could further transform the economics of solar power. If they prove effective, the town of Wadebridge would not only be self-sufficient in energy, but it could become a net exporter too.

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RM Mortgage Solutions Ltd is an appointed representative of TenetLime Ltd, which is authorised and regulated by the Financial Conduct Authority. TenetLime Ltd is entered on the FCA register (www.fca.org.uk/register) under reference 311266.